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Bridging the Gap II: Examining Trends and Patterns of Personal Bankruptcy in Cook County’s Communities of Color

May 3, 2011

This report examined geographical, gender-related, and chapter choice trends in data from federal bankruptcy courts in Cook County. It found that women make up a larger share of individual bankruptcy filers in all communities, and a dramatically larger share in African American communities, than men do.

Left Behind: Troubled Foreclosed Properties and Servicer Accountability in Chicago

January 12, 2011

The following report illustrates the relationship between foreclosures and vacant properties in the City of Chicago. It combines data from the City of Chicago on vacant and potentially vacant buildings with data on foreclosure filings, completed foreclosure auctions, and property transfers to better understand the number of vacant properties that have at some point been part of the foreclosure process.

Bridging the Gap: Credit Scores and Economic Opportunity in Illinois Communities of Color

September 1, 2010

This report analyzed credit score data from a major national credit bureau in large Illinois zip codes and found significant disparities in credit characteristics between communities of color and predominantly white communities, as well as between major metropolitan areas and non-metropolitan areas. The report explains the importance of credit scores and how they are used, and recommends several policies to improve economic opportunity for people and communities impacted by low credit scores. Included is an appendix with demographics and credit score averages and distributions for large Illinois zip codes.

Paying More for the American Dream IV: The Decline of Prime Mortgage Lending in Communities of Color

May 13, 2010

The financial crisis has led to significantly reduced access to mortgage credit for all borrowers and communities. In neighborhoods of color, however, where the foreclosure crisis has taken an especially severe toll, access to prime, conventional mortgage loans has declined precipitously -- to a much greater degree than in predominantly white neighborhoods. Families living in neighborhoods of color disproportionately lack access to affordable loans needed to purchase or improve their homes or to refinance their mortgage to secure a lower monthly payment. As this lack of access and the ongoing foreclosure crisis wreak havoc on communities of color, neighborhood rehabilitation efforts, includingsustainable loan modifications, are desperately needed to help families avert foreclosure and stay in their homes, and to prevent further destabilization of neighborhoods.This report focuses on changes in lending patterns in seven key metropolitan areas: Boston, MA; Charlotte, NC; Chicago, IL; Cleveland, OH; Los Angeles, CA; New York, NY; and Rochester, NY. It examines changes in the levels of prime, conventional home purchase and refinance mortgage lending in predominantly white communities and communities of color between 2006, the beginning of the foreclosure crisis, and 2008, the most recent year for which national mortgage lending data are available.The report also examines lending patterns for the four largest bank holding companies: Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo. Finally, the report includes recommendations for federal policy reforms that would require financial institutions to issue credit responsibly and protect all communities, particularly communities of color, from abusive lending practices.

Diverted Opportunity: Refund Anticipation Loans Drain Wealth from Low Wealth Tax Filers and Communities of Color

April 19, 2010

Community stakeholders and consumer advocates have long argued that high-cost refund anticipation loans (RALs) weaken the capacity of anti-poverty programs to build wealth and alleviate poverty. There is also concern that the wealth-depleting impact of RALs may be greater in communities of color. Refund anticipation loans (RAL) are loans that allow taxpayers to access the proceeds of a tax refund within hours or days of filing their tax return. Although convenient, these tax loans carry significant costs for borrowers, reducing the expected return by up to 10 percent. In 2006, taxpayers spent approximately $900 million on refund anticipation loans.  Nationwide, the highest percentage of RAL consumers are taxpayers that qualify for the Earned Income Tax Credit (EITC), the government's largest anti-poverty program. The EITC is designed to increase the income of working families and has been credited with lifting millions of people out of poverty. Using tax return data for tax year 2006 from the Brookings Institution, this report examines recent trends in the use of refund anticipation loans in Illinois among EITC recipients and by taxpayers living in communities of color. Additionally, this report provides estimates for the net aggregate financial loss experienced as a result of RAL fees for these borrowers and in these communities.

Government Interventions Have a Limited Impact on Chicago Area Foreclosure Activity in 2009

February 3, 2010

Analysis of 2009 data on new foreclosure filings and completed foreclosure auctions in the Chicago region shows: New foreclosure filings in the Chicago six-county region increased to over 70,000 in 2009, up 21 percent from 2008. Areas in the region with the most rapid rate of growth in foreclosure filings include North and Northwest Suburban Cook County and Kane County. Each area saw increases in new filings of between 48.5 and 40 percent from 2008. In the City of Chicago, Lincoln Park, Uptown, and East Side saw the largest increases. Lincoln Park saw an increase of 103.2 percent while Uptown and East Side saw increases of almost 75 percent from 2008. Parts of the region that for many years have been hard hit by the foreclosure crisis saw declines in new foreclosure filing activity in 2009. Foreclosure filings in South Suburban Cook County declined by 6.5 percent from 2008. In the City of Chicago, 25 community areas saw year over year declines. Most notably Woodlawn, West Pullman, and Englewood saw declines between 25.9 and 23.8 percent from 2008. The fourth quarter of 2009 had the highest level of foreclosure filing activity for any quarter since the foreclosure crisis began in 2006 with 24,053 new filings. South Cook County continues to have the highest level of foreclosure filings per property at 42.8 filings per 1,000 mortgageable properties, but the rest of the region is catching up. In 2009, the six-county area averaged 30.8 filings per 1,000 mortgageable properties. In the City of Chicago, new foreclosure filings on condominium units continue to increase at a dramatic rate of 36.8 percent from 2008, compared to an 8.6 percent increase in filings on single-family homes. Foreclosure filings on condo units now make up 24 percent of all foreclosure filings in the city. Changes in completed foreclosure auction activity between 2008 and 2009 varied dramatically across the region. For example, Cook County saw a nearly nine percent decrease in completed foreclosure auction between 2008 and 2009, while Kane County saw a 57.2 percent increase in completed auctions over the same period. While the total number of completed foreclosure auctions remained fairly stable between 2008 and 2009, the number of properties purchased at auction by outside buyers increased by nearly 46 percent from 2008. South Suburban Cook County and the City of Chicago continue to have the highest concentrations of REO foreclosure auctions per property with 17.2 and 15.8 auctions per 1,000 mortgageable properties respectively.Despite key federal, state, and local interventions developed to limit the impact of foreclosures on the region's homeowners and communities, the foreclosure problem in the Chicago region continued to grow in 2009. The following analysis details the growth of new foreclosure filing activity in the region as well as shifts in the geographic patterns of new foreclosure filings. Additionally, the report looks at changes in the levels of completed foreclosure auctions in the region. The report also includes detailed appendices with data for City of Chicago community areas and municipalities in the Chicago six-county region. Finally, this analysis includes data for DeKalb, Kendall, and Winnebago Counties.

Improving Economic Security Later in Life: Meeting the Credit and Financial Services Needs of Older Persons

October 22, 2009

This report examines financial products that take advantage of the economic vulnerability of older persons and highlights key features of some alternatives. The report is based on extensive conversations with leading members of the policy and advocacy community, financial services industry, and bank regulatory agencies. The report concludes with recommendations for both bank regulatory and financial institution policy to advance financial products that protect the economic security of older persons.

Benchmarking Branch Outcomes: Using Available Data to Analyze and Improve the Delivery of Retail Bank Services to Low-Wealth Communities

May 28, 2009

This report demonstrates that measuring how well a bank provides basic banking services to low-wealth consumers could be done using existing data. Using proprietary data collected from two bank branches located in low-wealth communities, it shows that the type of transaction level data, previously thought to be unavailable to regulators and costly to collect for financialinstitutions, is routinely collected by at least one large bank for marketing purposes.

Paying More for the American Dream III: Promoting Responsible Lending to Lower-Income Communities and Communities of Color

April 22, 2009

This report analyzes 2007 Home Mortgage Disclosure Act data and finds that, in low- and moderate-income communities, depositories with CRA obligations originate a far smaller share of higher-cost loans than lenders not subject to CRA. It also finds that lenders covered by CRA are much less likely to make higher-cost loans in communities of color than lenders not covered by CRA.

Collaborators or Competitors? Exploring the Relationships between Community Development Financial Institutions and Conventional Lenders in Small Business Finance

April 14, 2009

This study examines the nature of the interaction of banks and community development financial institutions (CDFIs) in small business lending. We examine the experience of six different CDFIs that vary by size, corporate structure, and market. We explore how they both collaborate and compete with regulated lenders, and how changes in local and national market dynamics affect their activities. Our case studies are not necessarily representative of the CDFI industry, but they offer insights on the factors that shape CDFIs' interactions with and responses to more mainstream institutions. Our findings are therefore more descriptive than prescriptive, although we offer suggestions for both CDFI practice and future research.

Beyond Payday Loans: Consumer Installment Lending in Illinois

March 19, 2009

This report analyzes detailed, loan level data and describes the terms and conditions, borrower demographics, and default characteristics of loans made by consumer installment lenders in Illinois.

The Chicago Region's Foreclosure Problem Continued to Grow in 2008

January 28, 2009

This report summarizes key foreclosure trends in the Chicago region for 2008 and updates Woodstock Institute reports and fact sheets released previously that illustrated key aspects of the foreclosure crisis such as the spread of the crisis to suburban communities, the potential impact of the foreclosures on Chicago's affordable rental housing market, and the growing number of foreclosures that were becoming bank-owned properties and likely sitting vacant. The report includes detailed appendices with data for City of Chicago community areas and municipalities in the Chicago Six County Area.